The price of Bitcoin (BTC) fell 7% in less than two hours, liquidating more than $100 million in long positions on September 3. At BitMEX alone, the sudden drop wiped out almost $99 million in long.
Three key factors are likely to have caused Bitcoin’s price to fall: miners‘ exits, the strength of the US dollar, and strong resistance.
As reported today, large-scale mining groups are sending higher than normal amounts of BTCs to the exchanges in recent days.
Bad News for Bitcoin: US Dollar Recovers from Multi-Annual Support
The data indicated that the miners were preparing to sell their Bitcoin Trader holdings, which added sales pressure to the markets. Ki Young-Ju, CEO of CryptoQuant, wrote
„The miners send a certain amount of BTC to the exchanges periodically, so they already have a large amount of BTC there. Every time they decide to sell, they seem to move a relatively significant amount of BTCs to other wallets, and some of them go to the exchanges.
The miners represent one of the two sources of external sales pressure in the Bitcoin market besides the exchanges. When miners start selling their properties, it could cause significant pressure on BTC.
US Dollar Rally
Over the past three days, the US dollar has recovered against other reserve currencies. The dollar showed particularly strong momentum against the euro.
As reported by Cointelegraph, the European Central Bank (ECB) warned that the euro has become too expensive. The ECB’s warning shook the markets, prompting a sell-off of the euro, as investors feared the imposition of restrictions.
As the dollar began to recover from a multi-year support area, both Bitcoin and gold declined dramatically.